"Most guys who get a letter saying they get zero money would never challenge it. They wouldn't know how," retired Army Command Sergeant Major Harold Lewis is quoted as saying in the report.
Lewis, who was disabled during the Vietnam War, fought the rejection of his claim and was eventually awarded $15,000.
The assessment was conducted by the House Oversight and Government Reform's domestic policy subcommittee, led by Representative Dennis Kucinich, Democrat of Ohio.
Officials at the defense accounting service and Lockheed Martin said they planned to address the concerns at a hearing today.
Spokesman Tom LaRock said the accounting service has processed more than 229,000 claims and paid out more than $149 million in entitlements. The office has established "a reliable and repeatable process enabling us to adjudicate incoming claims within 30 days of receipt," he said.
In mid-2006, the defense accounting service had hired Lockheed Martin to help it work through the long list of cases. The government identified some 133,000 veterans who were eligible for money through its "VA Retro" program. The list quickly grew by 84,000 more names because newly retired veterans or those with a changed disability status were being added.
Officials finally cleared the backlog this summer.
According to the House investigation, officials reached their goal only after lowering their standards. The defense accounting service was concerned about the number of errors in Lockheed Martin's work, but eventually suspended quality control procedures to prevent further program delays, Democrats said.
